ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into as of the 25th
day of June, 1997 ("Effective Date"), between ROASTERS CORP., a Florida
corporation, ("Seller"), whose address is 000 Xxxx Xxxxxxx Xxxxx Xx., Xxxxx 000,
Xx. Lauderdale, Fla. 33309 and CLUCKCORP INTERNATIONAL, INC., or its assigns
("Buyer"), a Texas corporation, whose address is 0000 X.X. Xxxx 000, Xxxxx 000,
Xxx Xxxxxxx, XX 00000.
WHEREAS, Buyer and Seller entered into an Asset Purchase Agreement
effective February 3, 1997 for the purchase and sale of certain assets located
in nine locations in Florida, Indiana and North Carolina and the assumption of
certain specified liabilities, such Asset Purchase Agreement being incorporated
herein for all purposes ("Original Contract"); and
WHEREAS, due to a landlord's refusal to consent to the assignment of a real
estate lease, one of the locations became impossible to transfer; and
WHEREAS, the parties desire to revise the transaction contemplated by the
Original Contract and enter into a new agreement to reflect the transfer of only
eight locations and certain other revised terms agreed to by the parties;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Buyer and Seller agree as follows:
1. Sale of Assets. Seller agrees to sell, and Buyer agrees to buy, upon the
terms and conditions and for the consideration herein stated, the following
properties and assets of Seller ("Assets"):
(a) The leasehold estates, and all rights of the tenant, existing under
and by virtue of the Lease Agreements described on Exhibit "A"
(individually, a "Lease" and collectively, the "Leases") by and
between various entities, as Landlord, and Seller, as Tenant, covering
the leasehold premises described therein (the "Leased Premises") in
Bradenton, Florida, Sarasota, Florida, Port Charlotte, Florida,
Indianapolis, Indiana and Charlotte, North Carolina; and
(b) All right, title and interest of Seller in and to the leasehold
improvements (in their present condition) located on the Leased
Premises or existing in connection with the Leases; and
(c) All restaurant equipment, telephone number for each location (if
transferable), point-of-sale systems (i.e. cash registers and the
like), machinery, furnishings, fixtures, and non-food inventories
(including without limitation, all pots, pans, utensils, flatware,
dishes, glassware, tablecloths and napkins) located on the Lease and
the Leased Premises (the "Equipment") substantially in the condition
in which they exist on the date hereof, Seller's sign frames, sign
structures and poles (but not sign panels).
Assets shall not include trade names, trademarks, Xxxxx Xxxxxx Restaurant
menus, table advertising placards, insignias, photos and similar point of
purchase advertising materials bearing Xxxxx Xxxxxx Restaurant logos, or
8 SITE PURCHASE AGREEMENT PAGE 1
franchise rights of Seller or its subsidiaries, their business records, business
and occupational licenses (other than certificates of occupancy for the
particular lease locations being assigned) and the right to use any of the
foregoing.
2. Consideration. As consideration for the Assets, Buyer agrees to pay
Seller the following:
(a) Assumption of the promissory notes listed on Exhibit "B"("Pappell
Notes"); and
(b) Assumption of the equipment leases listed on Exhibit "C" ("Equipment
Leases")(the Pappell Notes and the Equipment Leases shall collectively be
referred to herein as the "Assumed "Liabilities"); and
(c) One Million Fifty Thousand and No/100 Dollars ($1,050,000.00) in
immediately available funds (the "Cash Portion")
(d) Buyer's Promissory Note (the "Roasters Note") payable to Seller in the
amount of One Hundred Twenty-Seven Thousand Three Hundred Twenty-Six and 62/100
Dollars ($127,326.62), such Note bearing interest at eight percent (8%) per
annum, such Note being payable in equal monthly installments of principal and
interest amortized over five (5) years) and secured by the unencumbered
furniture, fixtures and equipment located in the Leased Premises at Port
Charlotte, Florida on the date of Closing.
Notwithstanding anything to the contrary set forth above, Buyer shall not
assume any liability or contingent liability of Seller other than the promissory
notes listed on Exhibit "B" and the leases listed on Exhibit "C". All other
liabilities are expressly not assumed by Buyer and are referred to herein as
Seller's "Retained Liabilities", whether such liabilities relate to the Leased
Premises or not.
3. Xxxxxxx Money. Pursuant to the terms of the Original Contract, Buyer has
previously delivered to Chicago Title Company c/o Xxxxx Xxxxx, National
Accounts, 00000 Xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000 ("Escrow Agent")
the sum of $75,000.00 as xxxxxxx money to bind this sale (the "Xxxxxxx Money").
Upon Closing, the Xxxxxxx Money shall be applied to the Purchase Price.
4. Closing. The sale and purchase of the Assets (the "Closing") shall be
consummated at the offices of Chicago Title Company (the "Title Company"), 00000
Xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000, on June 20, 1997 or such other
date as may be agreed upon by the parties (the "Closing Date").
5. Conditions for Closing. Buyer's obligation to close shall be contingent
on Seller's delivery of the following executed instruments on or before the
Closing Date:
(a) Delivery of a Consent to Assignment from each of the landlords under
the Leases in a form acceptable to both of the parties; and
(b) Delivery of a Lease Memorandum referencing the assignment to Buyer from
each of the landlords under the Leases in a form acceptable to both of the
parties; and
8 SITE PURCHASE AGREEMENT PAGE 2
(c) Delivery of a Non-Disturbance Agreement from any mortgagee of a Leased
Premise with a lien superior to the relevant Lease in a form acceptable to both
of the parties; and
(d) Delivery of a Consent to Assignment and any other required transfer
documents from each of the lessors under the Equipment Leases in a form
acceptable to both of the parties; and
(e) Delivery of a Consent to Assignment from the holders of the Pappell
Notes in a form acceptable to both of the parties; and
(f) Delivery of an agreement with Citicorp Leasing, Inc. whereby the cross
default provision in the security agreement securing the promissory note to K.R.
Memphis-Florida Associates, Ltd. which is to be assigned to Buyer is deleted for
all purposes; and
(g) Delivery of all necessary documents to the Escrow Agent for the
acceptable issuance of title policies to Buyer on all of the Leased Premises;
and
(h) Delivery of an Assumption Agreement(s) and Xxxx(s) of Sale for the
conveyance of the Assets in forms acceptable to both of the parties; and
(i) Delivery of the Roasters Note in a form acceptable to both of the
parties for execution by Buyer and UCC statements for Seller's benefit in
recordable form; and
(j) Delivery of a Escrow Fund Agreement in a form acceptable to both of the
parties and the Escrow Agent; and
(k) Delivery of a closing statement in a form acceptable to both parties
which reflects not only the Cash Portion, Roasters Note and the current balances
on all the Assumed Liabilities, but also the proration of taxes, utilities and
rents and charges of every kind as required under this Agreement; and
(l) At Closing, Seller at its expense, shall execute and deliver to Buyer
such other instruments as Buyer may reasonably request in order to vest Buyer
with title to the Assets, including:
(i) To the extent available, original copies of all necessary permits
issued by appropriate governmental authorities and utility companies when
the Assets were completed, including, but not limited to, certificate(s) of
occupancy;
(ii) To the extent available, all plans, specifications, mechanical,
electrical and plumbing layouts, equipment operating manuals, leasing
information and similar items in the possession of Seller and utilized in
connection with the operation of the Assets;
(iii) Seller shall deliver possession of all of the Assets in their
then "as is" condition to Buyer including, but not limited to, all keys to
all locks and all access codes to all electronic security systems on the
Assets in the possession of Seller and copies of any documents in the
possession of the Seller which are reasonably necessary for the continued
operation of the Assets. It is agreed that the building sign frames,
foundations, pylons and structural components of Seller's free-standing
sign structures are not to be removed by Seller and are to remain as part
of the Assets.
8 SITE PURCHASE AGREEMENT PAGE 3
(m) Delivery of letters from Seller to the various telephone companies
authorizing the transfer of the telephone numbers at each of the Leased Premises
in a form acceptable to both parties and the respective telephone companies; and
(n) The representations and warranties of Seller in Article V of the
Original Contract shall be deemed to be made again as of the time of the Closing
and shall then be true in all material respects; and Seller at the Closing shall
deliver to Buyer a currently-dated certificate to such effect signed by the
President or a Vice President of Seller. The representations and warranties of
Buyer in Article VI of the Original Contract shall be deemed to be made again as
of the time of the Closing and shall then be true in all material respects; and
Buyer at the Closing shall deliver to Seller a currently-dated certificate to
such effect signed by the President or a Vice President of Buyer.
It is expressly acknowledged and agreed that the representations,
warranties and covenants of Seller and Buyer in this Agreement and the Original
Contract, except as such covenants may be fully performed at or prior to the
time of the Closing, shall survive the Closing and shall be fully enforceable at
law or in equity against the party making such representation and warranty and
its successors and assigns.
(o) In addition to the Seller's certificate described in subsection 5(n)
above, Seller shall also deliver to Buyer an affidavit certifying that as of the
date of Closing, all employees have been paid in full, all accrued and due and
owing sales taxes and vendor's have been paid in full or will be paid within
thirty (30) days of receipt of an invoice or maturity of the obligation to pay
such debt.
(p) Seller and Buyer agree to cooperate in making arrangements to assure
that utility services to the Leased Premises are not interrupted as a result of
the change of ownership. It is agreed that utility meters shall be read on the
Closing Date, and all utility charges shall be prorated as of the Closing Date.
Seller shall be responsible for and shall pay for all utilities used or consumed
on the Leased Premises prior to the Closing Date. Seller shall be entitled to
receive all refundable utility deposits made by Seller. Buyer shall be
responsible for and shall pay for all utilities used or consumed on the Leased
Premises on and after the Closing Date.
6. Closing Costs and Expenses.
--------------------------
(a) At or prior to Closing, Seller shall pay the cost of recording any
curative instruments and releases, and any other costs which Seller is expressly
obligated to pay hereunder. Seller shall pay any and all fees charged by a
landlord or equipment lessor for a transfer or assignment consent.
(b) At Closing, Buyer shall pay the escrow fee, if any, the cost of
recording all closing instruments other than curative instruments and releases,
the cost of any title insurance policies, the cost of the UCC search ordered by
Buyer, and any other costs which Buyer is expressly obligated to pay hereunder.
(c) All rents and charges of every kind payable by the tenant under the
provisions of the Leases which are not yet due and payable as of the Closing
Date will be prorated between Seller and Buyer as of such date. Such prorations
will reflect appropriate credits to Seller with respect to any such rents or
8 SITE PURCHASE AGREEMENT PAGE 4
charges prepaid by Seller. On the Closing Date, prorations will be based on best
estimates and, as soon as the final accounting of such prorations can be made
(on the basis of actual and not estimated charges), Buyer and Seller will
determine the net effect of the prorations, and the party obligated to make
payment to the other as a result thereof will promptly do so upon demand. Seller
agrees to report to the various landlords all sales on the Leased Premises for
all periods up to the Closing Date and to make available to Buyer such sales
figures for the current lease year.
(d) Any security deposits held by Landlords under the Leases are not
included in the Purchase Price. At Closing, Buyer shall give Seller a credit on
the closing statement for the amount of any such security deposits related to
the Leases as additional consideration but not the security deposits related to
the Equipment Leases. Seller shall assign to Buyer its interest in any and all
security deposits.
(e) Each party shall pay its own attorneys' fees.
(f) At or prior to Closing, Seller shall pay all ad valorem real estate
taxes on the Assets for the year 1996 and prior years. Such real estate taxes
for the year of Closing shall be prorated at Closing, based upon the number of
days in the year of Closing elapsing before and after the Closing.
(g) All sales, transfer or use taxes and/or other fees, including bulk
sales taxes which may be imposed or assessed as the result of the transaction
effected by this Agreement, except those taxes imposed upon the income of
Seller, if any, shall be paid equally by the Buyer and the Seller as soon after
the Closing as may be required by taxing authorities pursuant to Federal, state
or local laws.
7. Post Closing Activities.
-----------------------
(a) Seller agrees that it will have prepared and submitted to Buyer within
forty-five (45) days after the Closing Date, audited financial statements for
each of the Leased Premises by the accounting firm of Coopers & Xxxxxxx
("Accountants") pursuant to an engagement letter executed by the Closing Date
and approved by Buyer, such audited financial statements to be in a form
acceptable to Buyer and sufficient for Buyer to meet its submittal obligations
to third parties. Seller agrees to make all records necessary for the completion
of such audited financial statements available to the Accountants and Buyer as
reasonable for completion of statements within the 45 day period.
(b) In the event any item listed in section 5 above is not completed and
delivered to Buyer on or prior to the Closing Date, Buyer may agree to proceed
with Closing based upon Seller's commitment and representation herein that it
will diligently pursue to completion and delivery of any and all such items as
soon as reasonably possible.
(c) Seller and Buyer acknowledge and agree that the proration of ad valorem
real property taxes has been an estimate based on last year's taxes and that the
actual tax liability for Buyer for 1997 may be changed by the various taxing
authorities. It is agreed that if the actual amount of taxes due and payable for
1997 changes as a result of a change in tax value or tax rates, the parties
shall make the necessary adjustments to such proration and payment shall be made
between the parties due to the adjusted proration. Additionally, Seller and
8 SITE PURCHASE AGREEMENT PAGE 5
Buyer acknowledge and agree that the 1997 taxes for the personal property
located in the Leased Premises is not known on the Closing Date and is not being
prorated at Closing. However, Seller acknowledges and agrees that Seller is
obligated to pay to Buyer within 20 days of receipt of notice from Buyer of the
assessed 1997 personal property taxes of the prorated amount of such taxes
levied on the personal property transferred to Buyer from Seller.
(e) It is expressly agreed and understood that the obligations of the
parties in this Section 7 shall survive closing and are binding obligations of
the parties fully enforceable at law or in equity against the party with the
obligation and its successors and assigns.
8. Indemnities.
-----------
(a) Seller agrees to indemnify Buyer and to hold Buyer harmless from any
loss, cost, expense, including attorney fees, or liability arising out of or in
connection with (i) the breach or falsity of any representation or warranty of
Seller in this Agreement, (ii) the use, occupancy, possession or operation of
the Assets as currently used at any time prior to the Closing Date and the
take-over date, (iii) the bankruptcy, insolvency or receivership proceedings
which Seller files or is filed against Seller, (iv) a breach of Seller's all
bills paid affidavit including a claim for unpaid employee wages or benefits
accrued prior to the Closing Date or a claim for unpaid sales tax or vendor
bills, (v) a claim for payment of fees for the completion of the audit described
in subsection 7(a) of this Agreement, (vi) an indemnifiable claim arising out of
any indemnities set out elsewhere in the Agreement, or (vii) the Retained
Liabilities. Buyer agrees to indemnify Seller and to hold Seller harmless from
any loss, cost, expense or liability arising out of or in connection with (i)
the breach or falsity of any representation or warranty of Buyer in this Asset
Purchase Agreement, (ii) the use, occupancy, possession or operation of the
Assets at any time after the take-over date, or (iii) a failure by Buyer to pay
the Assumed Liabilities. The provisions of this Section shall survive the
Closing.
(b) If any action, suit or proceedings shall be commenced against, or any
claim or demand be asserted against a party with respect of which the other
party proposes to demand indemnification, the recipient of such a demand for
indemnification (the "Indemnifying Party") shall, within thirty (30) days after
receipt of demand for indemnification have the right to assume the entire
control of the defense, compromise or settlement thereof, including the right of
the selection of counsel, subject to the right of the other party (the
"Notifying Party") to participate and, to the extent the Notifying Party shall
wish, to direct the defense at its expense and with counsel of its choice. In
connection therewith, the Notifying Party shall cooperate fully in all respects
with the Indemnifying Party in any such defense, compromise or settlement,
including, without limitation, making available to the Indemnifying Party all
pertinent information under the control of Notifying Party. The Indemnifying
Party will not compromise or settle any such action, suit, proceeding, claim or
demand without the prior written consent of Notifying Party.
(c) In order to secure Seller's indemnity obligations to Buyer described in
this Agreement, Buyer shall give to Escrow Agent out of the Cash Portion on the
Closing Date the amount of Seventy Five Thousand Dollars ($75,000.00)
("Indemnity Fund") to hold for Buyer's sole benefit pursuant to the Escrow
Agreement. If Seller fails to pay any of its indemnity obligations under section
8(a) above, Buyer shall send Seller notice of such breach or failure. If Seller
has not paid Buyer for such breach or failure within thirty (30) days from the
date of Buyer's notice to Seller, Buyer shall notify Escrow Agent of the
expiration of such 30 day notice period without payment and Escrow Agent shall
8 SITE PURCHASE AGREEMENT PAGE 6
have the right and obligation to release to Buyer and Buyer shall have the right
to withdraw from the Indemnity Fund, all such amounts due and owing, upon Escrow
Agent's receipt of Buyer's affidavit of rightful claim for the funds. After the
expiration of one (1) year from Closing Date, title to any amounts in excess of
pending claims by Buyer against the Indemnity Fund plus accrued interest on such
funds shall be transferred and released to Seller. Buyer and Seller agree to
execute an Escrow Fund Agreement with the Escrow Agent in form reasonably
requested by the Escrow Agent and agreeable to the parties, containing usual and
customary indemnities. It is agreed and understood that such $75,000.00 is not
due and payable to Seller until one (1) year from the Closing Date when such
amount, less any and all of Buyer's draws per the terms of the Escrow Agreement,
plus accrued interest on such funds will become due and payable to Seller.
(d) The Buyer agrees to waive any formal requirements, if any, of the Bulk
Transfer Law of the state in which the Leased Premises or Assets may be located.
Seller agrees to hold Buyer harmless and indemnify Buyer against any claims
asserted against Buyer due to the operation of the Roasters Restaurant on the
Property prior to Closing, or arising under the Bulk Transfer Law of the state
in which the Leased Premises or Assets may be located.
9. The parties hereby adopt and incorporate into this Agreement the
following provisions from the Original Contract: Section 3.03, Section 4.04,
Article V, Article VI, and Article X except for section 10.08.
10. Seller represents that it has examined and reviewed this transaction in
its entirety and states that this Agreement and the Original Contract each have
been fully, fairly and independently negotiated at arms length between Seller
and Buyer and that Seller, after an independent inquiry, knows of no facts,
circumstances or legal infirmity or impediment that would prevent Seller's
consummation of the Agreement or the Original Contract or the sales and
transfers of the Assets contemplated thereby.
11. To facilitate execution, this Agreement may be executed in one or more
counterparts as may be convenient or required. All counterparts shall
collectively constitute a single instrument. Further, each counterpart may be
executed an sent via telecopy to the other party and such telecopy signature
shall be valid and binding against the party signing and telecopying such
signature.
ROASTERS CORP.
Date: ______________ By:________________________________
Name:___________________________
Title:__________________________
CLUCKCORP INTERNATIONAL, INC.
Date: ______________ By:________________________________
Name:___________________________
Title:__________________________
Exhibit "A": Leases
Exhibit "B": Promissory Notes
Exhibit "C": Equipment Leases
34\c0163\009\8 store agreement.7h
8 SITE PURCHASE AGREEMENT PAGE 7
EXHIBIT "A"
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LEASES
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(1) Bradenton, Florida: Lease dated April 1, 1993 between predecessor
landlord of Bay- Gard, Ltd, current landlord, and K. R. Chicken, such Lease
having been assigned to Seller in June 1996; and
(2) Sarasota, Florida: Lease dated June 17, 1996 between KR Chicken
Management Corp, as landlord, and Seller, as tenant; and
(3) Port Charlotte, Florida: Lease dated January 7, 1994 between Sembler
Family Partnership #2, Ltd. and Xxxxxxx Retail Associates, Ltd., collectively as
landlord, and K. R. Chicken, Port Charlotte, Ltd., as tenant, such Lease having
been assigned to Seller in June 1996; and
(4) Eagleview Drive, Indianapolis, Indiana: Lease dated September 12, 1995
between CNL Net Lease Investors, L.P., as landlord, and Seller, as tenant; and
(5) Washington St., Indianapolis, Indiana: Lease dated October 12, 1994
between R. Xxx Xxxxxxxxxxx, as landlord, and Seller, as tenant; and
(6) County Line Rd., Indianapolis, Indiana: Lease dated August 1, 1994
between Xxxxxx Xxxxxx, d/b/a Xxxxxx Enterprises, as landlord, and Seller, as
tenant; and
(7) Eastway Dr., Charlotte, North Carolina: Lease dated August 2, 1994
between Eastway Square Limited Partnership, as landlord, and Seller, as tenant;
and
(8) 0xx Xx., Xxxxxxxxx, Xxxxx Xxxxxxxx: Lease dated May 20, 1994 between
Hardy Oil, Inc., as landlord, and Seller, as tenant.
8 SITE PURCHASE AGREEMENT PAGE 8
EXHIBIT "B"
-----------
PROMISSORY NOTES
----------------
(1) Bradenton, Florida - K. R. Chicken Assoc. Ltd.: A promissory note dated
6/17/96 in the original principal amount of $162,000.00 with a maturity date of
6/30/2000 payable in monthly payments of $1,643.11. The note balance after the
June 1997 payment is $157,110.16. This note is secured by a Security Agreement
granting as security the leasehold interest, equipment, furniture, etc. located
at the Bradenton, Florida site and all proceeds therefrom. It is agreed and
understood that the principal balance will be reduced at Closing by $15,924.85
for an outstanding principal balance to be assumed by Buyer of $141,185.31.
(2) Sarasota, Florida - K. R. Sarasota Associates, Ltd.: A promissory note
dated 6/17/96 in the original principal amount of $198,000.00 with a maturity
date of 6/30/2000 payable in monthly payments of $2,008.25. The note balance
after the June 1997 payment is $192,023.48. This note is secured by a Security
Agreement granting as security the leasehold interest, equipment, furniture,
etc. located at the Sarasota, Florida site and all proceeds therefrom. It is
agreed and understood that the principal balance will be reduced at Closing by
$15,924.85 for an outstanding principal balance to be assumed by Buyer of
$176,098.63.
(3) Port Charlotte, Florida - K. R. Memphis-Florida Associates, Ltd.: A
promissory note dated 6/17/96 in the original principal amount of $180,000.00
with a maturity date of 6/30/2000 payable in monthly payments of $1,825.68. The
note balance after the June 1997 payment is $174,566.83. This note is secured by
a Security Agreement granting as security the leasehold interest, equipment,
furniture, etc. located at the Port Charlotte, Florida site and all proceeds
therefrom. It is agreed and understood that the principal balance will be
reduced at Closing by $25,000.00 for an outstanding principal balance to be
assumed by Buyer of $149,566.83.
8 SITE PURCHASE AGREEMENT PAGE 9
EXHIBIT "C"
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EQUIPMENT LEASES
----------------
I. BRADENTON, FLORIDA
A. Advanta Business Services, Inc.
B. Equipment Leasing Company
C. CapTec Financial Group, Inc.
II. SARASOTA, FLORIDA
A. Advanta Business Services, Inc.
B. Equipment Leasing Company
C. CapTec Financial Group, Inc.
D. Advanta Business Services, Inc.
E. Orix Credit Alliance, Inc.
III. PORT CHARLOTTE, FLORIDA
A. Advanta Business Services, Inc.
B. Equipment Leasing Company
C. Orix Credit Alliance, Inc.
IV. EAGLEVIEW DRIVE, INDIANAPOLIS, INDIANA
A. CapTec Financial Group, Inc.
V. Advanta Business Services, Inc. - Lease No. 023-013-1711-005
which has a balance owing of $6,157.00 and monthly payments
of $131.00 plus tax, if such lease is verified to be for
equipment located in one of the Leased Premises.
34\c0163\009\8 store agreement.7h
8 SITE PURCHASE AGREEMENT PAGE 10
